Better governance to solve financial crisis

Former Mexican President Ernesto Zedillo and former Canadian Prime Minister Paul Martin were the opening speakers for the Centre for International Governance Innovation (CIGI) annual fall conference, held Friday Oct. 28.

The public discussion for the opening conference event was surrounding the issue of the gap in global governance, which was moderated by Thomson Reuters digital editor Chrystia Freeland.

The discussion started with the issue of the financial crisis in Europe.

“It is changes to the Lisbon Treaty that is the single most important thing that they can do, because Europe’s problem is structural and unless they solve that structural problem I don’t see how this or anything else would help,” said Martin.

President Zedillo, who was courteous enough to attend the event as he had just flown in from Europe, had this to say about Europe’s financial crisis, “I think that there was a realization that the European Monetary Union was a mistake that took too long for them to realize.”

Zedillo felt that if Europe continued the way that they were, it would eventually lead to a departure for the European Monetary Union.

“This would be not only the destruction of the union but the destruction of the European project of integration and let me tell you if that happens not only Europeans but humanity at large would be at a great risk,” he said.

Zedillo suggested that Europe has to take things a bit more seriously in the dimensions of economic and fiscal co-ordination.

Agreeing with Zedillo’s perspective of the European financial crisis, Martin suggested that, “Unless the Europeans are willing to build institutions of nationhood then it is very hard to see how they are going to be able to deal with these problems.”

Martin added that “The mess that was created was created in the G7.”

In regards to the group of 20 nations (G20), Martin said, “The reason that there is a need for the G20 is that the leading economies of the world are no longer compatible, neither culturally, historically or economically, they are very different and what they have to do is work this out and I believe that they are in the process of working it out.”

Martin felt that the fundamental focus of Europe should be to build institutions that will allow them to prevent the next crisis.

He said, “There has to be an international institution, that effectively deals with the rules and regulations that will govern a globally seamless industry.”

On the contrary, Zedillo has hope for Europe though currently feels that the G20 is a disaster.

According to Zedillo, in regards to the G20’s failure, he claimed that it has “a problem of legitimacy in its origin.”

Zedillo claimed that the performance of the G20 and the claims that they make are not equitable to one another.

Martin, meanwhile, reminded everyone of the nature of democracy when stating,

“The fact is that the G20 has not kept all its promises, but neither have democratic politicians and leaders,” he said.